Air China: Management discussion of Apr-2010 operating data

On a month-over-month basis, performance varied; regional routes recorded accelerating growth, while international and domestic routes experienced a slight decline in traffic compared with the previous month. The cargo business maintained solid year-over-year traffic growth. Regional routes saw continued growth on the cargo side, although the drop in international and domestic cargo traffic drove down month-over-month performance on the cargo side.

Passenger capacity, measured in Available Seat Kilometers (ASK), grew 9.8% year-over-year. Passenger traffic, measured by Revenue Passenger Kilometers (RPK), saw 16.5% growth in April. Capacity on international routes increased by 1% year-over-year, while RPK rose by 14.9%. Capacity on domestic and regional routes increased by 14.5% and 28.1% year-over-year, respectively, with RPK up 16.4% and 37.5%, respectively. The passenger load factor was 80.2%, up 4.6% year-over-year. The passenger load factor for international, domestic and regional routes improved by 9.8, 1.4 and 5.4 percentage points, respectively, to 81.2%, 79.6% and 79.5%, respectively. (Please note these figures do not include Shenzhen Airlines and Air Macau.)

Cargo capacity, measured in Available Freighter Tonne Kilometres (AFTK), rose by 10% year-over-year. Freighter tonnage carried, and Revenue Freighter Tonne Kilometres (RFTK) increased by 23% and 26.9%, respectively, compared with the same month in 2009. Driven by growth in international routes, the cargo load factor improved to 59.5%, an increase of 7.9 percentage points year-over-year.

Effective April 5, Air China launched its daily Shanghai Pudong-Yinchuan route; effective April 25, Air China launched its daily Beijing-Chaoyang and Beijing-Jiuzhaitou routes.

Due to volcano ash cloud in Europe, Air China cancelled 96 European flights in April; however, this has little impact on the overall operation of the Company.

During the month, the Company's average jet fuel purchase price at international airports was RMB5,114 per tonne, and the average purchase price of jet fuel for international flights at the top six Chinese airports was RMB5,327 per tonne, representing 53% and 51% year-over-year increases, respectively. The Company's average jet fuel purchase price for domestic flights was RMB5,634 per tonne, an increase of 42% compared with April last year.

Air China purchased a total of 278,800 tonnes of jet fuel during the month at an average price of RMB5,445 per tonne, a year-over-year increase of 47%.